1. Firm I has variable cost VCi = yi^2/10 and fixed cost FCi = 2000. (1)...

1. Firm I has variable cost VCi = yi^2/10 and fixed cost FCi = 2000.

(1) Find total cost Ci(yi), average cost ACi, marginal cost Mci and the firm supply function Si(p)

(2) There are n=50 firms identical to firm I, facing a market demand of D(p) = 1000-250p. Find the market supply function S(p), the market equilibrium price p*, the market equilibrium quantity Y*.

(3) Given price p* you found in part b, what is the profit maximising yi* that firm i produces? How much profit does firm i make?

Expert Solution

Rahul Sunny answered 8 months ago

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